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Copyright 2006 Northrop Grumman Corporation0

Northrop Grumman 2006 Institutional Investor Conference

November 9, 2006

Gaston KentVice President, Investor RelationsNorthrop Grumman Corporation


Certain statements and assumptions in these presentations and materials contain or are based on “forward-looking” information. Such “forward-looking” information includes, among other things, projected deliveries,expected funding for various programs, future effective income tax rates, financial guidance and estimated amounts regarding sales, segment operating margin, pension expense, employer contributions under pension plans and medical and life benefits plans, cash flow and earnings per share, and is subject to numerous assumptions and uncertainties, many of which are outside Northrop Grumman’s control. These include Northrop Grumman’s assumptions with respect to future revenues, expected program performance and cash flows, returns on pension plan assets and variability of pension actuarial and related assumptions, the outcome of litigation and appeals, environmental remediation, divestitures of businesses, successful reduction of debt, successful negotiation of contracts with labor unions, effective tax rates and timing and amounts of tax payments, and anticipated costs of capital investments, among other things. Northrop Grumman’s operations are subject to various additional risks and uncertainties resulting from its position as a supplier, either directly or as subcontractor or team member, to the U.S. Government and its agencies as well as to foreign governments and agencies; actual outcomes are dependent upon various factors, including, without limitation, Northrop Grumman’s successful performance of internal plans; government customers’ budgetary constraints; customer changes in short-range and long-range plans; domestic and international competition in both the defense and commercial areas; product performance; continued development and acceptance of new products and, in connection with any fixed price development programs, controlling cost growth in meeting production specifications and delivery rates; performance issues with key suppliers and subcontractors; government import and export policies; acquisition or termination of government contracts; the outcome of political and legal processes and of the assertion or prosecution of potential substantial claims by or on behalf of a U.S. government customer; natural disasters, and any associated amounts and timing of recoveries under insurance contracts, availability of materials and supplies, continuation of the supply chain, contractual performance relief and the application of cost sharing terms, impacts of timing of cash receipts and the availability of other mitigating elements; terrorist acts; legal, financial and governmental risks related to international transactions and global needs for military aircraft, military and civilian electronic systems and support, information technology, naval vessels, space systems, technical services and related technologies, as well as other economic, political and technological risks and uncertainties and other risk factors set out in Northrop Grumman’s filings from time to time with the Securities and Exchange Commission, including, without limitation, Northrop Grumman reports on Form 10-K and Form 10-Q.

Safe Harbor Statement


Presentation Format

GuidanceEffective 1/1/07 Radio Systems business will be transferred from Space Technology to Mission SystemsReported results for Q4 2006 & Full Year 2006 will not reflect the transferGuidance does not reflect the changeGuidance does not include Essex

Segment results 2003 - 2005Presented on a pro forma basis reflecting

Previously announced organizational realignmentsTransfer of Radio Systems businessAdoption of dual-margin recognition on inter-segment sales


The Leadership Team

Bob HelmCorp VP

Bus Dev &Govt Relations

Jim O’NeillCorp VP & President

InformationTechnology

MissionSystems

Jerry AgeeCorp VP & President

Jim CameronCorp VP & President

TechnicalServices

Information & Services

Jim PittsCorp VP & President

Electronic Systems

Electronics

Mike PettersCorp VP & President

NewportNews

Phil TeelCorp VP & President

ShipSystems

Ships

Burks TerryCorp VP &

General Counsel

Law

Ian ZiskinCorp VP & Chief

HR & Admin Officer

HR &Administration

Rosanne O'BrienCorp VP

Communications

Space Technology

Alexis LivanosCorp VP & President

Scott SeymourCorp VP & President

Integrated Systems

Aerospace

Ron SugarChairman & CEO

Wes BushPresident& CFO

The Right Team For Our StrategyThe Right Team For Our Strategy


Ships

Operating Margin

1 Non-GAAP Metric - see reconciliation and definition on pages 25 & 262 Dependent on long-term business mix

9+High 8Low 8Total Operating Margin

~10Low 9Low 9Segment OM1

9+Mid 8~7Ships

~12High 11Mid to High 11Electronics

9-10~9Low 9Aerospace

8-9~8Low 8Information & Services

Operating Margin %

Long-TermMargin

Opportunity2

2007E2006E

$31-32~$30.2Total

~10%~$5Ships

~5%~$6.6Electronics

~(5)%~$9Aerospace

8-10%~$11I & S

2006E ($B) 2007EGrowth

Growth


Ship Systems Overview

November 9, 2006

Philip TeelPresidentNorthrop Grumman Ship Systems

Institutional Investor’s Conference


Ship Systems at a Glance. . .

$3B – 2005 Sales17,000 employeesThree primary operating locationsSole designer, builder of large deck amphibs and next generation Coast Guard fleetSurface combatants co-design and constructionPrimary customers: U.S. Navy & U.S. Coast GuardKatrina recovery proceeding on schedule

$5.3B Total Backlog$5.3B Total Backlog

Expeditionary Warfare

58%

Surface Combatants

32%

Commercial& Other

2%

Coast Guard & Coastal Defense

8%

2006E Sales2006E Sales2006E Sales


KatrinaKatrina


Katrina . . . Impact










LPD 17 Sail Away . . . November 28, 2005


DDG 98 Sail Away . . . December 17, 2005


LPD 20 Float Off . . . August 11, 2006


LHD 8 Float Off . . . September 22, 2006


NSC 1 Float Off . . . September 29, 2006


LPD 18 Sea Trials . . . October 23, 2006


Production/Support Contracts

Surface CombatantsArleigh Burke Class (5 x DDG 51)

AmphibsWASP Class (1 x LHD 8)San Antonio Class (6 x LPD 17)

Coast GuardNational Security Cutter (3 x NSC)

Fleet Support

Future Pursuits

Surface CombatantsCruiser (CG(X)

AmphibsMaritime Pre-position Force Future (MPF(F)

Coastal DefenseInternational

Transition Current Platforms to New Missions with Increased NOC Content

In Development

Surface CombatantsZumwalt Class (DDG 1000)

AmphibsLarge Deck Amphibs (LHA 6)

Coast GuardUSCG Deepwater

Fast Response Cutters (FRC)

LPD DDG 1000 CG(X)


Performance Improvement Strategies

Drives OM and Cash from Operations Improvements

Ship Schedules J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D

DDG 103 105 107 110DDG 1000 DH DDG 1000 Delivery 2012

LPD 18 19 20 21 22 23 24LHD 8/LHA 6 8 LHA 6 Delivery 2012

NSC 1 2 3 4 5FRC 1

Indicates Ships Under Construction at the Time of Katrina

2007 2008 2009 2010 20112007 20082007 20082007 2008

PeopleRetention &

Development ofWorkforce

Value Stream CentricOrganization

Facility

Shipyard Recovery

ShipyardRegeneration

Tools and ProcessProcess Maturity &

Improvement

Improving Quality

EnablingTechnology

Production Support


Business Base2007 2008 2009 2010 2011

Surface CombatantsDDG 103DDG 105DDG 107DDG 110DDG 1000DDG 1001 Deckhouse

Expeditionary WarfareLPD 18LPD 19LPD 20LPD 21LPD 22LPD 23LPD 24LPD 25LHD 8LHA 6

Coast GuardNSC 1NSC 2NSC 3NSC 4NSC 5FRC 1FRC 2

Current Schedule


Focus on Performance

Sales Drivers:Katrina…full recovery in 2007LHA 6 and DDG 1000 constructionCoast Guard NSC production

Margin Expansion:Post Katrina vs KatrinaRegeneration & process focus

Cash Generation:Driving Working Capital improvementsCap-ex reduces post Katrina recovery

Sales ($M) and Op Margin as % of Sales

0

1,000

2,000

3,000

4,000

2003 2004 2005

0%2%

4%6%

8%10%

Sales OM % Pre-K OM %


Summary: Focus on Affordability and Shareholder Return

Strategic FocusImproved affordability

Reduce cost to produceModify current designs for expanded missions

Leverage broader company capabilities to increase NOC content

Operating FocusPeople, process, and facility investments linked to ship by ship improvement plans

Financial PerformanceKatrina recovery and regenerationContracts with acceptable risk profiles and cash terms


Newport News Overview

November 9, 2006

Mike PettersPresidentNorthrop Grumman Newport News

2006 Institutional Investor Conference


Newport News ... Delivering Naval Superiority

$2.9B – 2005 Sales19,200 employeesThree Primary Operating LocationsSole Designer, Builder, and Refueler of Nuclear-Powered Aircraft CarriersOne of Two Companies Capable of Designing and Building Nuclear-Powered SubmarinesSubstantial After-Market Business PortfolioQuality Earnings Delivering Stable Cash Flow

$7B Total Backlog$7B Total Backlog

2006E Sales

Submarines28%

Services & Other3%

CarrierConstruction

43%Carrier

Refueling &Overhaul

26%


Business Base2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Carrier ConstructionREAGAN (CVN 76)BUSH (CVN 77)CVN 78CVN 79

Submarine ConstructionVIRGINIA (SSN 774)TEXAS (SSN 775)HAWAII (SSN 776)NORTH CAROLINA (SSN 777)NEW HAMPSHIRE (SSN 778)NEW MEXICO (SSN 779)SSN 780SSN 781SSN 782SSN 783VCS 11VCS 12VCS 13VCS 14VCS 15VCS 16

Carrier RefuelingEISENHOWER (CVN 69)VINSON (CVN 70)ROOSEVELT (CVN 71)LINCOLN (CVN 72)

Carrier OverhaulENTERPRISE (CVN 65)Others REAGAN PSA BUSH PSA

Current Navy Plan to Newport NewsAdvance Planning and Procurement


Market

Near-term opportunitiesCVN 78VCS Block IIICVN 71 RCOH

Long-term growth expectationsCVN 79 and later - one per 4 yearsVCS - two per yearCarrier refuelingCarrier de-fueling & deactivation

Success FactorsStability of CNO's 30-Year Shipbuilding PlanSolid Navy & Congressional support for our programs George H.W. Bush (CVN 77)

USS Texas (SSN 775)

USS Texas (SSN 775)USS Texas (SSN 775)

George H.W. Bush (CVN 77)

George H.W. Bush (CVN 77)George H.W. Bush (CVN 77)


Focus on Performance

2006-2007 sales drivers:

CVN 77 – BushCVN 69 – EisenhowerCVN 70 – VinsonCVN 21VCS Construction

Achieving Margin ExpansionStrong Cash Flow

Improving Working Capital

Sales ($M) and OM% of Sales

0

500

1,000

1,500

2,000

2,500

3,000

2003 2004 20055.0%

5.5%

6.0%

6.5%

7.0%

7.5%

8.0%

8.5%

9.0%


Summary – Building Shareholder Value

Secure backlog and predictable, stable futureDrive process excellence for improved efficiencies and higher profit marginsDeliver high quality cash and earnings performanceContinue to strengthen our franchise in nuclear ship programsDeliver value and performance in support of Navy's vision for the future fleetPursue growth in adjacent fleet maintenance and carrier de-fueling markets

Economy & Finance

northrop grumman Ships